Knorr-Bremse Increases Profitability Significantly at the Beginning of the Year

Knorr-Bremse Increases Profitability Significantly at the Beginning of the Year

• Demand in both divisions continued to be robust in first quarter of 2024: order intake at € 2.1 billion, order book at € 6.7 billion
• Revenues up 3.5% year over year at approximately € 1.97 billion
• Operating EBIT rises 24% to € 238 million, operating EBIT margin from 10.0% to 12.1%
• M&A initiatives under BOOST 2026 strategy program fully on track: Kiepe Electric and SafetyDirect sold, rail signaling technology business acquired from Alstom in North America
• Full-year guidance 2024 confirmed
   

Munich, May 8, 2024 – Knorr-Bremse AG, the global market leader for braking systems and a leading supplier of other safety-critical rail and commercial vehicle systems, was able to increase its profitability further in the first quarter of 2024.

Marc Llistosella, Chief Executive Officer (CEO) of Knorr-Bremse AG: “We are very happy with the strong start in 2024. Not only did we bring in solid financial results, but we also achieved the first important milestones of our BOOST 2026 strategy program. The sales of Kiepe Electric and SafetyDirect are evidence of our successful portfolio optimization. At the same time, we are determinedly carrying out a transformation of the Group, and the recently announced acquisition of Alstom’s rail signaling technology business in North America is a good example of this. The purchase is a boost for our rail business and is particularly valuable for us thanks to the promising market development, high margins, and its very profitable service business.”

Frank Weber, Chief Financial Officer (CFO) of Knorr-Bremse AG: “The revenue increase and strong margin development in the first quarter are a good basis for the current fiscal year.  They reflect our variety of efficiency-raising measures as well as successful pricing adjustments. Knorr-Bremse has a strong balance sheet, which provides a high degree of flexibility for us operationally. The acquisition that we are working toward should not impact our strong credit rating.”

Despite the still-challenging economic market conditions, Knorr-Bremse successfully recorded very good order intake in the first three months of 2024. Its two divisions each received orders valued at over one billion euros. Consequently, the total order intake reached € 2,112 million (Q1 2023: € 2,176 million), thanks in particular to the robust rail market and its extraordinarily high demand. The order book, adjusted for Kiepe Electric, grew to € 6,728 million as at March 31, 2024 (March 31, 2023: € 6,513 million excluding Kiepe Electric). Consolidated revenues improved 3.5% to € 1,974 million (Q1 2023: € 1,908 million), which is in particular due to a significant 12.7% revenue increase in the Rail division. In the Truck division, the revenue decline of 4.0% was less strong than expected.

Alongside the overall positive revenue development, there were efficiency measures and successful pricing initiatives ensuring strong operating EBIT growth of 24.2%. This results in  growth of operating EBIT margin from 10.0% in last year’s quarter to 12.1%.
Knorr-Bremse also achieved a significant improvement of its free cash flow, which, at € -95 million in the first quarter, was up more than € 100 million year over year (Q1 2023: € -199 million).
 

Overview of Strong Development in Both Divisions

Rail Vehicle Systems Division (RVS):

• Order intake rose to € 1,062 million thanks to very strong demand (Q1 2023: € 1,000 million).
• The order book, adjusted for Kiepe Electric, increased to € 4,739 million (March 31, 2023: € 4,424 million excluding Kiepe Electric).
• Revenue was up a significant 12.7% at € 964 million (Q1 2023: € 855 million).
• Operating EBIT improved by 30.1% from the corresponding prior-year figure to € 146 million (Q1 2023: € 112 million).
• The operating EBIT margin improved by a significant 200 base points to 15.1%
  (Q1 2023: 13.1 %)

Commercial Vehicle Systems Division (CVS)

• Order intake amounted to € 1,051 million (Q1 2023: € 1,176 million).
• The order book was worth € 1,991 million as at March 31, 2024, remaining at a high level (March 31, 2023: € 2,091 million).
• Revenues reached € 1,011 million in the first quarter (Q1 2023: € 1,053 million).
• Operating EBIT rose by a significant 16.8% to € 111 million (Q1 2023: € 95 million).
• The operating EBIT margin increased from 9.0% in Q1 2023 to a very robust 11.0%.

Guidance

Knorr-Bremse is confirming its guidance for the 2024 fiscal year. Accordingly, the company expects revenues between € 7,700 million and € 8,000 million, an operating EBIT margin between 11.5% and 12.5%, and free cash flow between € 550 million and € 650 million.

 The full quarterly report is available at www.knorr-bremse.com. Notes to and reconciliations with the financial indicators used can be found in the 2023 Annual Report of Knorr-Bremse AG (available under Investor Relations/Annual Report).

Knorr-Bremse Group Key Performance Indicators:

 Key Figures for the Knorr-Bremse Divisions:

Media Contacts:

Claudia Züchner, Spokeswoman, Financial Communications

Phone: +49 89 3547 2582, e-mail: claudia.zuechner@knorr-bremse.com

Investor Relations:

Andreas Spitzauer, Head of Investor Relations

Phone: +49 89 3547 182310, e-mail: andreas.spitzauer@knorr-bremse.com 

About Knorr-Bremse

Knorr-Bremse (ISIN: DE000KBX1006, ticker symbol: KBX) is the global market and technology leader for braking systems and a leading supplier of other rail and commercial vehicle systems. Knorr-Bremse’s products make a decisive contribution to greater safety and energy efficiency on rail tracks and roads around the world. 33,000 employees at over 100 locations in approximately 30 countries develop and produce innovative solutions and services that meet the highest technological standards. In 2023, Knorr-Bremse’s two divisions together generated revenues of approximately € 7.9 billion. For almost 120 years, the company has been at the cutting edge of its industries, driving innovation in mobility and transportation technologies with a leading edge in connected system solutions. Knorr-Bremse is one of Germany’s most successful industrial companies and profits from the key global megatrends: urbanization, sustainability, digitalization, and mobility.

DISCLAIMER

This publication has been independently prepared by Knorr-Bremse AG. It may contain forward-looking statements which address key issues such as strategy, future financial results, events, competitive positions, and product developments. These forward-looking statements – like any business activity in a global environment – are always associated with uncertainty. They are subject to a number of risks, uncertainties, and other factors, including, but not limited to, those described in Knorr-Bremse’s disclosures. Should one or more of these risks, uncertainties or other factors materialize, or should underlying expectations not occur or should assumptions prove incorrect, the actual results, performances, or achievements of Knorr-Bremse may vary materially from those described in the relevant forward-looking statements. Such forward-looking statements may be identified by words such as “expect,” “want,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “estimate,” “will,” “project” or words of similar meaning. Knorr-Bremse does not intend, nor does it assume any obligation, to update or revise its forward-looking statements regularly in light of developments which differ from those anticipated.

This publication may include supplemental financial measures – not clearly defined in the applicable financial reporting framework – that are or may be alternative performance measures (non-GAAP measures). Knorr-Bremse’s financial position, financial performance, and cash flows should not be assessed solely on the basis of these alternative supplemental financial measures. Under no circumstances do they replace the performance indicators presented in the consolidated financial statements and calculated in accordance with the applicable financial reporting framework. The calculation by other companies that report or describe similarly titled alternative performance measures may vary despite the use of the same or similar terminology.

^[1] Each adjusted for order book of Kiepe companies

^{[2]Adjusted in 2023}